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Re:NCTA Agrees Title II Virtuous Cycle Is Working by dragonwriter on Monday June 12, 2017 @01:54PM (#14539322)
> One of the things Richard Thaler points out in Misbehaving (on behavioral economics) is that traditional economics cannot decide whether out is descriptive or normative.

That's because "traditional economics" doesn't actually exist as an entity, it's a strawman.

It can't "decide" because it includes different people amd groups who can decide, and who have decided differently.

Re:NCTA Agrees Title II Virtuous Cycle Is Working by mcguire on Monday June 12, 2017 @10:49PM (#14542575)
"Suppose the government its economy plunge into a deep recession and decides to give everyone a one-time tax cut of $1,000 per person. The consumption function tells us how much of the money will be spent and how much will be saved. Economic thinking about the consumption function changed quite dramatically between the mid-1930s and the mid-1950s.

"[Keynes] assumed that if a household received some incremental income, it would consume a fixed proportion of that extra income.... If we take the case of a middle-class family that saves 5% of any additional income earned, Keynes predicts that the MPC from a $1000 windfall would be 95%, or $950.

"[Milton Friedman] proposed that households would use a three year horizon to determine what their permanent income is, so would divide the extra spending evenly over the next three years. That means that in the first year, the family would spend about $317.

"[Franco Modigliani] predicts that the windfall will be consumed evenly over [the remainder of the individual's lifetime, say 40 years] meaning that the MPC to consume from the windfall will be just $25 per year.

"[Robert Barro] assumes that their time horizon is effectively forever. In this world, the predictions about how much money will be spent depend on from where the money comes. If the windfall had come from a lucky night at the casino, Barro would make the same prediction as Modigliani about consumption. But if the windfall is a temporary tax cut, the beneficiary realizes that his heir's taxes will eventually have to go up to pay for the cut he is receiving, so he won't spend any of it.

"I gave a talk in the Cornell psychology department. I began my talk by sketching Modigliani's life-cycle hypothesis. My description was straight-forward, but to judge from the audience reaction, you would have thought this theory of savings was hilarious. Fortunately, the economist Bob Frank was there. When the bedlam subsided, he assured everyone that I had not made anything up. The psychologists remained stunned in disbelief, wondering how their economics department colleagues could have such wacky views of human behavior.

p. 94-97

Re:NCTA Agrees Title II Virtuous Cycle Is Working by dragonwriter on Tuesday June 13, 2017 @12:17AM (#14542832)
None of that is relevant to the ability of “traditional economics” to decide between being a descriptive and a normative field, as all are examples of hypothesized predictive models, not normative ones. They may seem naive from the perspective of a field focussed on behavior at a more micro level (even microeconomics aims at predicting higher-level aggregate behavior than psychology), and, heck, they may even be hopelessly naive, but that's not even German e to the question.

(And whether or not an economist was there to put an imprimatur on it, all of those descriptions are mischaracterizations, but again that's neither here nor there.)